Suppose That We Have Identified Three Important Systematic Risk Factors

question 25

Multiple Choice

Suppose that we have identified three important systematic risk factors given by exports,inflation,and industrial production.In the beginning of the year,growth in these three factors is estimated at -1%,2.5%,and 3.5% respectively.However,actual growth in these factors turn out to be 1%,-2%,and 2%.The factor betas are given by b_EX = 1.8,b_I = 0.7,and b_IP = 1.0.Calculate the equity's total return if the company announces that an important patent filing has been granted sooner than expected and will earn the company 5% more in return.

• A)7.95%
• B)9.95%
• C)11.55%
• D)7.90%
• E)9.35%

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Definitions:

Paraphilic Behaviors

Unusual or abnormal sexual behaviors or impulses towards objects, situations, or individuals, outside of cultural norms.

Anal Sex

Sexual activity involving penetration of the anus, practiced by people of all sexual orientations for pleasure or intimacy.

Transvestism

The practice of dressing in clothes traditionally associated with the opposite sex, primarily for reasons other than sexual arousal or gratification.

Noncoercive Paraphilia

Harmless and victimless paraphilia sexual behavior.